Brent Crude Slips Below $88 as US Inventories Rise and Global Demand Falters
Oil prices slipped below $88 per barrel on Thursday as a significant build-up of US crude inventories and weakening global demand expectations challenged their geopolitical premium.
Brent crude fell 1.3% to $87.86 in Asian trading, while WTI dropped 1.4% to $82.13. This reversal came two days after Brent reached $90 as traders became less confident that Washington and Tehran were close to an agreement capable of restoring normal traffic through the Strait of Hormuz.
A massive US inventory build of 17.4 million barrels in the week ended August 7, coupled with higher imports and weaker exports, drove much of this change. The International Energy Agency now expects global oil demand to contract by 1.6 million barrels a day in 2026, a steeper fall than projected last month.
Physicians supply remains tight, but the market's ability to sustain prices above $90 without fresh demand support is uncertain. If Brent cannot hold above $88, traders may be forced to reevaluate their risk premia and adjust their bets accordingly.